The VA Loan Advantage

The VA Loan program is the most
powerful home loan program on the market for many
veterans, service members and military families.
These flexible, government-backed loans come with significant benefits that open the doors of
homeownership to veterans who might otherwise struggle to obtain
financing.

VA loans require no down payment or private mortgage insurance. They feature competitive rates and
terms and allow qualified borrowers to purchase a home with little to no money out of pocket.

The increasing popularity has stemmed from the loan program's signature benefits, which include:

1. No Down Payment

Saving money and building credit can be difficult for service members
who are constantly on the move. With the VA Loan, qualified borrowers can finance 100 percent of the
home's value without putting down a dime. Take a look at the chart below to see how much you can save
through the no-money-down benefit of the VA Loan.

2. No Private Mortgage Insurance

Many conventional lenders require borrowers to pay private monthly mortgage insurance unless
they're able to put down at least 20 percent, which is a tough task for many veterans. Private
mortgage insurance (PMI) is an insurance that protects lenders in case of a borrower default.

With a VA Loan, however, there is no PMI. This is because the federal government backs all VA Loans
and assumes the risk on behalf of the borrower that is typically covered by the PMI.

This VA Loan advantage allows you to build more and more equity in your house, effectively saving
you thousands of dollars over the life of your mortgage.

PMI Savings per Month:

3. Competitive Interest Rates

Interest rates on home loans are based on risk assumed by the bank to finance the loan.
Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk
and can offer interest rates that are typically 0.5 to 1 percent lower than conventional
interest rates.

Pair that lower interest rate with the ability to purchase a home with no money down and no
private mortgage insurance and the savings start adding up significantly.

Additional Benefits

Basic Allowance for Housing

Basic Allowance for Housing (BAH) is a significant benefit for qualified
active military members. Lenders can count your Basic Allowance
for Housing as effective income, which means you can use BAH to pay some or all of your monthly
mortgage costs.

No Pre-Payment Penalty

With many different types of loans, paying off a home loan before it matures results in a
pre-payment penalty. This is because lenders miss out on additional opportunities to collect
interest payments. The pre-payment penalty is a way for financial institutions to recoup some
of that money.

The VA Loan allows borrowers to pay off their home loan at any point without having to worry
about a pre-payment penalty. With the absence of a pre-payment penalty, borrowers are free to
consider future home purchases and refinancing options.

Savings and interest rates shown here are for illustrative purposes only and may vary based on
a variety of factors. All loans require approval and proof of eligibility and are subject to
the complete terms and conditions outlined in the loan agreement documents.

A VA approved lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.
Customers with questions regarding our loan officers and their licensing may visit the
Nationwide Mortgage Licensing System & Directory
for more information.